Gold prices saw a steady climb on Tuesday, remaining close to historical highs. Market conditions reflect rising investor caution surrounding the upcoming US election and widespread expectations of a Federal Reserve interest rate cut in November. Key economic data due this week are also being closely monitored for their potential influence on the Fed’s decision.
By 1114 GMT, spot gold had risen by 0.3% to $2,750.87 per ounce, not far from last Wednesday’s record peak of $2,758.37. US gold futures also showed a 0.3% increase, trading at $2,763.40. Analysts suggest that this price movement reflects a strategic position from gold investors, who are capitalising on the recent slowdown in the US dollar and treasury yields. Han Tan, chief market analyst at Exinity Group, indicated that gold’s upward momentum is being supported by both election-related risks and firm expectations of an impending Fed rate cut.
Tan noted that gold prices could edge further towards $2,800 in the coming days if these pressures on market sentiment persist. Anticipation is high as the Federal Reserve prepares for its interest rate decision on 7 November. Investors are keenly observing upcoming economic reports, including US job openings due later today, ADP employment on Wednesday, the US Personal Consumption Expenditures on Thursday, and the monthly payrolls report on Friday. Each of these data points will be critical in evaluating the likelihood of a rate cut.
According to CME’s FedWatch Tool, markets currently assign a 95% probability of a 25-basis-point rate reduction by the Fed next month. Historically, gold performs well in low-interest-rate environments and is seen as a safeguard against political and economic instability. The closely contested race between Donald Trump and Kamala Harris for the US presidency on 5 November only adds to the appeal of gold for cautious investors.
From a technical perspective, the Relative Strength Index (RSI) for gold has reached 69, indicating it is on the verge of entering “overbought” territory, which starts at 70. This level suggests that the gold price may face some resistance to further gains without additional market catalysts.
With significant political and economic factors at play, the outlook for gold remains strong. Investors appear ready to maintain their gold holdings in anticipation of further movement toward record price levels, particularly if the expected rate cut and election-related uncertainties materialise.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
